Depending on proximity to a body of water or the type of mortgage loan, flood insurance is a requirement for certain home and business owners and may be on its way to becoming unaffordable.
Mike Kinsey lost his home in Park City in the historic floods of 2022 that inundated many areas along the Yellowstone River.
Like many in the state, he had no flood insurance when the tragedy struck.
“I should have a quarter of a million dollars on this house. I should’ve had a quarter of a million dollars in flood insurance. I don’t. My homeowner’s policy wouldn’t cover anything from the flood. So I got a denial from them, my mortgage company finally put me in forbearance, which means my payments are piling up,” Kinsey said.
Now it may be even more expensive to buy flood insurance in the future.
Montana is one of 10 states suing the federal government over rate increases in the National Flood Insurance Program, administered by FEMA, that could see rates skyrocket by as much as 700%.
The states recently asked a federal judge to put the increases on hold. A decision has not yet been made.
In coastal regions such as Florida and Louisiana, it could be impossible to run a business or own property in a flood zone, but the impact could be felt in inland states such as Montana.
“The scenery or the functionality of it comes at a price for building in those areas, so it’s something you want to prepare for. Development in certain areas of the floodplain is fine, but in certain areas it’s not, it’s not the best choice,” Yellowstone County Public Works Director and Floodplain Administrator Tim Miller said on Tuesday.
He believes last year’s floods are the main reason Montana is part of this lawsuit.
“A lot of it was due to the extreme flooding we had last spring. Yellowstone County was affected a little bit, but nothing like Park County, Stillwater County and Carbon County. Those counties were really hit hard. Property loss, business loss, all kinds of losses, so I think that’s probably one of the biggest reasons why Montana decided to jump in,” added Miller.
But is flood insurance a big issue in Montana?
The state saw 591 claims made to the National Flood Insurance Program between 2010 and 2022, and only 89 of those were in Yellowstone County.
“Less than 5% of our total customer base in this area currently has an active flood insurance policy. And over 98% of the counties in the United States that have had flooding or flood events in their area, of that 98%, 4% of them had active flood insurance policies at the time of those events,” Stockman Bank Account Executive and Licensed Producer Reilly Parisot said on Wednesday.
So why did Montana Attorney General Austin Knudsen decide to join the lawsuit? He said it came down to a procedural issue. “In fundamentally changing the way it calculates rates for flood insurance, FEMA bypassed almost every requirement under the law.”
Whatever the reason, climate scientists argue that no matter where someone lives, things like flood insurance could become a necessity.
“It’s a really big issue that affects everybody at some point, and so when you have these huge catastrophic weather events like this, if you’re near a body of water, it’s almost inevitable that you’re going to be affected to some degree,” Parisot added.
